Petition for Writ of Certiorari — Tarek Obaid, Petitioner v. United States

APPENDIX

i

APPENDIX

TABLE OF CONTENTS

Appendix A Opinion in the United States Court of

Appeals for the Ninth Circuit

(August 24, 2020) . . . . . . . . . . . . . App. 1

Appendix B Order Denying Motion to Dismiss for

Lack of Personal Jurisdiction and

Improper Venue in the United States

District Court Central District of California

(August 15, 2018) . . . . . . . . . . . . App. 47

Appendix C O r d e r

Denying

Motion for

Reconsideration; Order Granting

Motion to Certify Order for

Interlocutory Appeal in the United

States District Court Central District

of California

(September 24, 2018) . . . . . . . . . App. 52

Appendix D Order in the United States Court of

Appeals for the Ninth Circuit

(December 20, 2018) . . . . . . . . . . App. 56

Appendix E Order Denying Petition for Rehearing

En Banc in the United States Court of

Appeals for the Ninth Circuit

(November 2, 2020). . . . . . . . . . . App. 58

Appendix F Const i t u t i o n a l

a nd St a tut ory

Provisions Involved. . . . . . . . . . App. 60

App. 1

APPENDIX A

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 18-56657

D.C. No. 2:17-cv-04446- DSF-PLA

[Filed: August 24, 2020]

_______________________________________

)

)

)

Plaintiff-Appellee, )

)

v.

)

)

TAREK OBAID,

)

)

Claimant-Appellant, )

)

CERTAIN RIGHTS TO AND

)

INTERESTS IN SHARES OF

)

SERIES D PREFERRED STOCK IN

)

PALANTIR TECHNOLOGIES,

)

)

Defendant.

)

_______________________________________)

UNITED STATES OF AMERICA,

OPINION

App. 2

Appeal from the United States District Court

for the Central District of California

Dale S. Fischer, District Judge, Presiding

Argued and Submitted September 11, 2019

Pasadena, California

Filed August 24, 2020

Before: Johnnie B. Rawlinson, Sandra S. Ikuta, and

Mark J. Bennett, Circuit Judges.

Opinion by Judge Rawlinson;

Dissent by Judge Ikuta

SUMMARY*

_________________________________________________

Personal Jurisdiction / In Rem Civil Forfeiture /

Venue

The panel affirmed the district court’s order denying

Tarek Obaid’s motion to dismiss for lack of personal

jurisdiction and for lack of proper venue a civil

forfeiture case involving Obaid’s shares of stock in

Palantir Technologies, a corporation with its principal

place of business in California.

Obaid is a citizen of Saudi Arabia who wired $2

million from his account in Switzerland to a bank in

California to purchase stock in Palantir. The

government filed this in rem civil forfeiture action

against Obaid’s Palantir shares. Obaid moved to

dismiss the forfeiture action, contending that in

*

This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the reader.

App. 3

personam jurisdiction over him was necessary to

adjudicate this in rem action, and the district court was

required to apply the minimum contacts standard to

determine whether he had sufficient contacts with the

forum.

The panel held that the United States Supreme

Court’s decision in Shaffer v. Heitner, 433 U.S. 186

(1977) (requiring the application of a minimum

contacts framework to each person who claims

ownership of property), addressed a quasi in rem

proceeding rather than a true in rem proceeding. The

panel held further that Tennessee Student Assistance

Corp. v. Hood, 541 U.S. 440 (2004), provided more

direct guidance for the issues before the panel. The

panel concluded that Hood supported its view that

Shaffer was limited to quasi in rem actions and did

extend to in rem actions, such as this one. The panel

held that the district court did not err when it

determined that the constitutional due process

requirements set forth in International Shoe Co. v.

Washington, 326 U.S. 310 (1945), were inapplicable to

this in rem action. In an in rem action, the focus for the

jurisdictional inquiry is the res, in this case Obaid’s

Palantir shares, rather than Obaid’s personal contacts

with the forum.

The panel held that venue was proper because

sufficient acts giving rise to the civil forfeiture occurred

in the Central District of California. The panel

concluded that the conspiratorial activity in the

Central District was sufficient to support venue given

the relatively low standard set forth in 28 U.S.C.

§ 1355. The panel also held that whether Obaid was

App. 4

involved in the conspiracy was immaterial to the venue

analysis.

Dissenting, Judge Ikuta wrote that the majority

erred in not applying Shaffer v. Heitner, and created a

split with two circuits that applied Shaffer and seven

circuits that expressly construed it to cover ordinary in

rem proceedings. Judge Ikuta would remand to the

district court to conduct the required minimum

contacts analysis.

COUNSEL

David B. Rivkin (argued), Jonathan R. Barr, Lee A.

Casey, Mark W. DeLaquil, Elizabeth Price Foley, and

Andrew M. Grossman, Baker Hostetler LLP,

Washington, D.C.; Jonathan B. New, Baker Hostetler

LLP, New York, New York; for Claimant-Appellant.

Joshua L. Sohn (argued), Trial Attorney; Woo S. Lee,

Deputy Chief; Deborah Connor, Chief; Money

Laundering and Asset Recovery Section, United States

Department of Justice, Washington, D.C.; L. Ashley

Aull, Chief, Criminal Appeals Section; Nicola T.

Hanna, United States Attorney; United States

Attorney’s Office, Los Angeles, California; for PlaintiffAppellee.

David L. Zifkin, Boies Schiller Flexner LLP, Santa

Monica, California; Matthew L. Schwartz, Boies

Schiller Flexner LLP, New York, New York; for Amicus

Curiae Qentas Holdings.

App. 5

OPINION

RAWLINSON, Circuit Judge:

Appellant-claimant Tarek Obaid (Obaid) appeals

the district court’s order denying his motion to dismiss

for lack of personal jurisdiction and for lack of proper

venue in this civil forfeiture case involving his shares

of stock in Palantir Technologies (Palantir), a

corporation with its principal place of business in

California. Reviewing de novo, we affirm the judgment

of the district court.

I. BACKGROUND

Obaid is a citizen of Saudi Arabia, who serves as the

chief executive officer of PetroSaudi International

(PSI), an oil and gas exploration company. In 2009, PSI

entered into a joint venture with 1Malaysia

Development Berhad (1MDB), an investment company

wholly-owned by the government of Malaysia. 1MDB

was created to pursue economic development for the

benefit of the Malaysian people. According to the

government, 1MDB was riddled with fraud from its

inception, as multiple individuals conspired to divert

and launder billions of dollars from the fund. From

2009 to 2011, 1MDB and PSI arranged for the

fraudulent transfer of more than $1 billion from 1MDB

to a Swiss bank account in the name of Good Star

Limited (Good Star Account). Jho Low, a Malaysian

national, was involved in the creation of 1MDB, and

laundered more than $400 million through the Good

Star Account into the United States. Low then used the

laundered funds to, among other things, purchase

luxury items and real estate.

App. 6

As the chief executive of PSI, Obaid allegedly

facilitated the 1MDB and PSI joint venture, including

by signing various documents to effectuate the

transfers of money into the Good Star Account.

Additionally, Obaid personally received $153 million

from the Good Star Account that was processed

through a bank account in New York and ultimately

sent to Obaid’s personal account in Switzerland.

Relevant to this appeal, Obaid wired $2 million from

his account in Switzerland to a bank in California to

purchase 2,500,000 shares of Series D preferred stock

in Palantir.1

As part of its efforts to recoup money fraudulently

obtained in the scheme, the government filed this in

rem civil forfeiture action against Obaid’s Palantir

shares. In a lengthy complaint, the government alleged

that the Palantir shares were forfeitable because they

were derived from proceeds traceable to the wire fraud

and money laundering scheme involving 1MDB and

PSI. Contemporaneous with the action brought against

Obaid’s Palantir shares, the government filed multiple

civil forfeiture suits seeking to reclaim assets such as

luxury hotels, yachts, certain movies rights, and

expensive real estate in Beverly Hills, connected to the

fraudulent scheme. However, it is unclear from the

complaint whether—and to what extent—Obaid

maintains an ownership interest in the additional

1

Because this is an in rem action, the defendant in this appeal is

property—the Series D Palantir shares. See United States v. 2,164

Watches, More or Less Bearing a Registered Trademark of Guess?,

Inc., 366 F.3d 767, 771 (9th Cir. 2004).

App. 7

assets being sought by the government in the related

civil forfeiture actions.

Obaid confirmed his ownership of the Palantir

shares and subsequently moved to dismiss the

forfeiture action, contending that the district court

lacked personal jurisdiction over him as the property

owner. Obaid also maintained that venue was improper

because the disputed res, i.e., the Palantir shares, was

not alleged to be located in the Central District of

California. The district court rejected Obaid’s argument

that personal jurisdiction over him was required to

adjudicate rights to the named property. And the

district court concluded that venue was proper in the

Central District, reasoning that civil forfeiture actions

may be brought in the district “in which any of the acts

or omissions giving rise to the forfeiture occurred.” In

the district court’s view, venue was proper because

multiple acts giving rise to the alleged conspiracy

occurred in the Central District.

Obaid moved for reconsideration of the district

court’s rulings and, in the alternative, to certify the

rulings for interlocutory appeal. The district court

denied the motion for reconsideration, but granted the

motion to certify its ruling for interlocutory appeal.

II. STANDARD OF REVIEW

A district court’s rulings on personal jurisdiction

and venue are reviewed de novo. See Myers v. Bennett

Law Offices, 238 F.3d 1068, 1071 (9th Cir. 2001).

App. 8

III. DISCUSSION

Obaid contends that the district court erred when it

denied his motion to dismiss for lack of personal

jurisdiction. According to Obaid, in personam

jurisdiction over him was necessary to adjudicate this

in rem forfeiture action, and the district court was

required to apply the minimum contacts standard

established by United States Supreme Court precedent

to determine whether he had sufficient contacts with

the forum. Applying that standard, Obaid asserts that

he lacked sufficient contacts with the forum to satisfy

due process requirements. Obaid also challenges the

district court’s determination that venue was proper in

the Central District.

A. In Personam Jurisdiction in an In Rem Action

Obaid urges us to conclude that the district court

erred when it held that the United States Supreme

Court’s decision in Shaffer v. Heitner, 433 U.S. 186

(1977) does not control the outcome of the jurisdiction

issue in this in rem civil forfeiture action. Obaid

maintains that Shaffer squarely stands for the

proposition that all assertions of jurisdiction—in rem,

quasi in rem, and in personam—must be evaluated

according to a minimum contacts standard.

Before delving into the issues in this case, it is

helpful to distinguish among the types of potential

jurisdiction in federal cases. “In personam jurisdiction,

simply stated, is the power of a court to enter judgment

against a person.” SEC v. Ross, 504 F.3d 1130, 1138

(9th Cir. 2007). By contrast, in rem jurisdiction is the

court’s power to adjudicate rights over property. See id.

App. 9

“Jurisdiction in rem is predicated on the fiction of

convenience that an item of property is a person

against whom suits can be filed and judgments

entered. . . .” United States v. Approximately $1.67

Million (US) in Cash, Stock & Other Valuable Assets,

513 F.3d 991, 996 (9th Cir. 2008) (citation and internal

quotation marks omitted). More nebulous is the concept

of quasi in rem jurisdiction:

A quasi in rem action is basically a

halfway house between in rem and in

personam jurisdiction. The action is not

really against the property; rather, the

action involves the assertion of a personal

claim against the defendant of the type

usually advanced in an in personam

action and the demand ordinarily is for a

money judgment, although in some

contexts the objective may be to

determine rights in certain property. The

basis for transforming the suit from one

in personam to an action against the

defendant’s property is the attachment or

garnishment of some or all of the property

the defendant may have in the

jurisdiction.

Ventura Packers, Inc. v. F/V JEANINE KATHLEEN,

424 F.3d 852, 860 n.4 (9th Cir. 2005), as amended

(citations and alteration omitted).

Fortunately, there is no dispute that the underlying

action is in rem because “[a] forfeiture action is in rem.”

$1.67 Million, 513 F.3d at 996 (citation omitted). The

Supreme Court recognizes a “sharp distinction between

App. 10

in rem civil forfeitures and in personam civil penalties

such as fines.” United States v. Ursery, 518 U.S. 267,

275 (1996). While a civil action to recover penalties is

similar to a criminal prosecution in that “it is the

wrongdoer in person who is proceeded against, in an in

rem forfeiture proceeding, it is the property which is

proceeded against.” Id. at 283 (citation, alteration, and

internal quotation marks omitted). Thus in a civil

forfeiture proceeding in rem, “jurisdiction [is]

dependent upon seizure of a physical object.” Id. at 277

(citation omitted). Here, the focus is on the district

court’s jurisdiction over the property in dispute, i.e.,

Obaid’s Palantir shares. See Ross, 504 F.3d at 1138.

To resolve this case we must decide which of two

cases is the more pertinent precedent. The first is

Shaffer, which involved a Delaware shareholder

derivative suit against Greyhound Corporation, as well

as its officers and directors. See 433 U.S. at 189–90. In

conjunction with his action, the plaintiff moved to

sequester the Delaware property—stock in Greyhound

Corporation—of the individual defendants. See id. at

190–91. Under Delaware law, the primary purpose of

“sequestration” was to use the property as a basis to

“compel the personal appearance of a nonresident

defendant to answer and defend a suit brought against

him in a court of equity.” Id. at 193 (citation omitted).

The individual defendants challenged the suit on

personal jurisdiction grounds, contending that they

lacked sufficient contacts with Delaware to satisfy the

jurisdictional requirements of International Shoe Co. v.

Washington, 326 U.S. 310 (1945). See Shaffer, 433 U.S.

at 192–93. The Delaware Supreme Court rejected the

defendants’ argument, holding that the quasi in rem

App. 11

jurisdiction was predicated “on the presence of capital

stock [in Delaware], not on prior contact by defendants

with this forum.” Id. at 195 (quoting Greyhound Corp.

v. Heitner, 361 A.2d 225, 229 (Del. 1976)).

The United States Supreme Court reversed the

ruling of the Delaware courts See id. In the Supreme

Court’s view, the same precepts that govern in

personam jurisdiction, “fair play and substantial

justice,” also applied in Shaffer because “judicial

jurisdiction over a thing, is a customary elliptical way

of referring to jurisdiction over the interests of persons

in a thing.” Id. at 207 (citation, footnote reference, and

internal quotation marks omitted). Logically, this

means that “in order to justify an exercise of

jurisdiction in rem, the basis for jurisdiction must be

sufficient to justify exercising jurisdiction over the

interests of persons in a thing.” Id. (footnote reference

and internal quotation marks omitted). “The standard

for determining whether an exercise of jurisdiction over

the interests of persons is consistent with the Due

Process Clause is the minimum-contacts standard

elucidated in International Shoe.” Id. The Supreme

Court thus concluded that “all assertions of state-court

jurisdiction must be evaluated according to the

standards set forth in International Shoe and its

progeny.” Id. at 212 (footnote reference omitted).

Left with this conclusion from Shaffer, one might

deduce that Obaid’s position carries the day. But not so

fast. Another Supreme Court decision, Tennessee

Student Assistance Corp. v. Hood, 541 U.S. 440 (2004),

decided some twenty-five years after Shaffer, has

App. 12

something to say about in rem jurisdiction and it does

not say the same thing that Shaffer seemingly says.

The Tennessee Student Assistance Corporation

(TSAC) is a government agency that administers

student assistance programs in the state of Tennessee.

See id. at 443. Among other things, TSAC guarantees

student loans to residents of Tennessee. See id. at 444.

Hood was one such resident, and she signed promissory

notes for loans guaranteed by TSAC. See id. Years after

receiving the loans, Hood filed a “no asset” bankruptcy

petition. She did not mention her student loans and

those debts were not included in her discharge. See id.

Hood then reopened her bankruptcy petition for the

limited purpose of seeking a discharge of her student

loans pursuant to the “undue hardship” provision of the

Bankruptcy Code. See id. TSAC was named as a

defendant. See id. at 445.

TSAC filed a motion to dismiss Hood’s complaint for

lack of jurisdiction, on the basis of the state’s sovereign

immunity under the Eleventh Amendment. See id. The

bankruptcy court, Sixth Circuit Bankruptcy Appellate

Panel, and the Sixth Circuit all agreed that states have

no immunity from suit in the bankruptcy context. See

id.

The Supreme Court granted certiorari and affirmed.

See id. at 443. Rather than addressing the “broader

question” of whether states have no immunity from

suit in the bankruptcy context, the Court addressed the

narrower question of whether discharge of a student

loan debt implicated Eleventh Amendment immunity.

See id. at 445. The Court’s answer to this question was

“no.” See id.

App. 13

To resolve this question, the Court first clarified

that “[t]he discharge of a debt by a bankruptcy court is

. . . an in rem proceeding and that [b]ankruptcy courts

have exclusive jurisdiction over a debtor’s property.” Id.

at 447 (citations omitted). The Court noted that its

precedent “has drawn a distinction between in rem and

in personam jurisdiction, even when the underlying

proceedings are, for the most part, identical.” Id. at

453. For the purpose of adjudicating the discharge

claim, the bankruptcy court’s “jurisdiction is premised

on the res, not on the persona.” Id. at 450. The Court

concluded that the case did not implicate the Eleventh

Amendment because the bankruptcy court’s in rem

jurisdiction “allows it to adjudicate the debtor’s

discharge claim without in personam jurisdiction over

the State.” Id. at 453 (citation omitted). “The

bankruptcy court’s in rem jurisdiction permits it to

determine all claims that anyone, whether named in

the action or not, has to the property or thing in

question. . . . Id. at 448 (citation, alteration, and

internal quotation marks omitted). This conclusion

follows because in an in rem action, “jurisdiction over

the person is irrelevant if the court has jurisdiction

over the property.” Id. (citation omitted). The Court

emphasized that Hood did not ask the bankruptcy

court to exercise personal jurisdiction; she simply

wanted “a determination of the dischargeability of her

debt.” Id. For that reason, the Eleventh Amendment

was not implicated and the denial of TSAC’s motion to

dismiss was upheld. See id. at 455.

Neither of these two cases is precisely on point.

Shaffer addressed a quasi in rem proceeding rather

than a true in rem proceeding. See Ventura Packers,

App. 14

424 F.3d at 860 n.4 (describing a quasi in rem

proceeding as “a halfway house between in rem and in

personam jurisdiction” with the “action not really

against the property” but more “a personal claim . . . of

the type usually advanced in an in personam action”).

As noted in Shaffer, the primary purpose of

sequestration was “not to secure possession of

property” but to “compel the personal appearance of a

nonresident defendant to answer and defend a suit

brought against him in a court of equity.” 433 U.S. at

193 (citation omitted). In other words, “the only role

played by the property [was] to provide the basis for

bringing the defendant into court.” Id. at 209 (footnote

reference omitted). Indeed, once the defendant made a

general appearance before the court, the res was

released. See id. at 193. Unlike in a true in rem

proceeding, the seized property “[was] not the subject

matter of [the] litigation, nor [was] the underlying

cause of action related to the property.” Id. at 213.

Thus, despite the Court’s reference to in rem

proceedings, it is apparent from its analysis that

Shaffer is limited to quasi in rem proceedings.2 There

2

See also James Weinstein, The Federal Common Law Origins of

Judicial Jurisdiction, 90 Va. L. Rev. 169, 246 & n.28 (2004) (“In

continuing the common law process that gave rise to the in rem

rules in the first place, the Court has, for a variety of reasons

(including forum state interest, history, and considerations of

individual fairness), decided that most of the traditional in rem

rules continue to square with its vision of how state judicial

authority should be allocated in our federal system. Only where

changed circumstances have rendered a traditional practice

outmoded and dysfunctional, as was the case with attachment

jurisdiction [in Shaffer], has the Court, in the best common law

tradition, declared the practice invalid.”).

App. 15

is no dispute that civil forfeiture does not involve the

quasi in rem proceedings contemplated by Shaffer, in

which the “action is not really against the property;

rather, the action involves the assertion of a personal

claim against the defendant of the type usually

advanced in an in personam action.” 4A C. Wright & A.

Miller, Federal Practice and Procedure § 1070 (4th ed.

2020).

This conclusion is supported by the failure of the

Court to expressly overrule its longstanding precedent

anchoring in rem jurisdiction to the presence of the res.

See, e.g., Republic Nat. Bank of Miami v. United States,

506 U.S. 80, 84 (1992) (“Certainly, it long has been

understood that a valid seizure of the res is a

prerequisite to the initiation of an in rem civil

forfeiture proceeding. . . .”) (citations omitted); see also

Kline v. Burke Constr. Co., 260 U.S. 226, 229 (1922)

(“Where the action is in rem the effect is to draw to the

federal court the possession or control, actual or

potential, of the res . . .”); Overby v. Gordon, 177 U.S.

214, 221 (1900) (“An essential characteristic of a

proceeding in rem is that there must be a res or

subject-matter upon which the court is to exercise its

jurisdiction. . . .”).

It would be “exceeding strange”3 if the Supreme

Court intended to eliminate the historical distinction

3

William Shakespeare, The Merchant of Venice, Act 1, Scene 1.

The dissent maintains that the Supreme Court “explicitly said”

that it was overruling decades of precedent governing in rem

jurisdiction. Dissenting Opinion, p.38–39. However, it is notable

that the dissent does not point to one in rem case that the Supreme

Court overruled in Shaffer.

App. 16

between in personam and in rem jurisdiction without

explicitly saying so. See United States v. Ten Thousand

Dollars, 860 F.2d 1511, 1513 (9th Cir. 1988) (applying

“traditional in rem principles” in a forfeiture action).4

We should not assume that the Supreme Court has

implicitly overruled its precedent. See Shalala v. Ill.

Council on Long Term Care, Inc., 529 U.S. 1, 18 (2000)

(“This Court does not normally overturn, or so

dramatically limit, earlier authority sub silentio. . . .”).

In our view, the more reasonable interpretation of

Shaffer limits it to the scenario presented to the

Court—a quasi in rem statutory scheme.

The Supreme Court evidently did not sweep away

traditional in rem principles in Shaffer, as it relied on

those same principles almost thirty years later in Hood

to conclude that “the bankruptcy court’s jurisdiction is

premised on the res, not on the persona.” Hood, 541

U.S. at 450. We are persuaded that Hood provides

more direct guidance for the issue we are called upon

to decide. Unlike in Shaffer, Hood involved a true in

rem case. In this case and in Hood, the res is the

subject of the action, not a substitute for the person

who is the subject of the action. See Shaffer, 433 U.S.

at 213 (explaining that the property was “not the

subject matter of this litigation”).

The dissent’s attempt to restrict Hood’s application

of traditional in rem principles to bankruptcy cases

where the absent party is the creditor, rather than the

debtor, is unpersuasive. The Court was clear that its

4

The dissent ignores this language in its citation of this case. See

Dissenting Opinion, p.40.

App. 17

jurisdiction was “premised on the res,” see Hood, 541

U.S. at 448, and that “jurisdiction over the person is

irrelevant if the court has jurisdiction over the

property.” Id. at 453 (citation omitted). Contrary to the

chara ct eri za tion in the dissent of our

“misunderstanding of the nature of bankruptcy

proceedings” and our misreading of Hood, Dissenting

Opinion, 34, we fully understand and faithfully apply

the statutory bankruptcy scheme as interpreted by the

Supreme Court in Hood. Under 28 U.S.C. § 1334(e),

bankruptcy courts have “exclusive jurisdiction of all the

property, wherever located, of the debtor as of the

commencement of such case, and of property of the

estate.” Thus, in rem bankruptcy jurisdiction

“essentially creates a fiction that the property—

regardless of actual location—is legally located within

the jurisdictional boundaries of the district in which

the court sits.” Beck v. Fort James Corp. (In re Crown

Vantage, Inc.), 421 F.3d 963, 971 (9th Cir. 2005)

(citation omitted) (emphasis in the original).5 The

jurisdictional statute here creates a similar legal

fiction, providing that a “forfeiture action or proceeding

may be brought in the district court for the district in

which any of the acts or omissions giving rise to the

forfeiture occurred,” even if the property is located in a

foreign country. 28 U.S.C. § 1355(b).

5

The dissent elides our reliance on this precedent, preferring to

reference only a treatise cited in Hood. See Dissenting Opinion,

p.36. The dissent’s only attempted response to the express

language in Hood is to seek to blunt its impact through resorting

to “context.” Id.

App. 18

The discharge of a debt by a bankruptcy court is “an

in rem proceeding.” Hood, 541 U.S. at 447. Although

the bankruptcy court’s discharge order “operat[es] as

an injunction to prohibit creditors from attempting to

collect or to recover the debt,” the court need not have

personal jurisdiction over the creditor. Id.6

If we adopt the broad reasoning of Shaffer

advocated by Obaid and the dissent, we would be

discarding a longstanding body of Supreme Court

authority. We hasten to add that we do not read Hood

as overruling or purporting to overrule Shaffer. Rather,

we conclude that each survives in its respective sphere:

Shaffer in the realm of quasi in rem jurisdiction and

Hood in the realm of in rem jurisdiction.7

6

The dissent states that “[n]othing in Hood suggests that a court

may exercise in rem jurisdiction without personal jurisdiction over

the owner of the res.” Dissenting Opinion, p. 36. But Hood is clear

that in rem jurisdiction is “premised on the res, not on the

persona”—this statement would make no sense if the personal

jurisdiction is also necessary. 541 U.S at 450. The “owner of the

res” is “persona” not “res.” In rem jurisdiction does not include an

additional personal jurisdiction requirement over the debtor: the

debtor filed the petition and 28 U.S.C. § 1334(e) provides the

bankruptcy court with “exclusive jurisdiction of all the property . . .

of the debtor . . . and of property of the estate.” In accordance with

traditional in rem principles, jurisdiction over property is all that

is required. See also United States v. Gurley, 434 F.3d 1064, 1068

(8th Cir. 2006) (holding that when the “government, as a creditor,

asserted a right to payment” through filing a proof of claim in

debtor’s bankruptcy proceeding, “there was no need to establish

personal jurisdiction over” the debtor “[b]ecause it was an in rem

proceeding”).

7

Contrary to the dissent’s unpersuasive reading of Hood, see

Dissenting Opinion, p.36, everything in Hood points to the court’s

App. 19

The dissent concedes that in the forty-plus years

since Shaffer was decided, no court has dismissed a

civil forfeiture action for lack of personal jurisdiction

over a claimant. See Dissenting Opinion, p.43 n.12. The

dissent attempts to minimize this fact by saying that

“this is to be expected.” See id. We beg to differ.

Generally, when the Supreme Court makes a sweeping

change in a fundamental legal theory, there is a

tsunami of reversals in the lower courts applying the

new precedent. One need only compare the legal

aftermath of the Supreme Court’s decision in Ashcroft

v. Iqbal, 556 U.S. 662 (2009), to make the point. Iqbal

redefined the pleading standards under Rule 8 of the

Federal Rules of Civil Procedure, see id. at 678–80, and

prompted a barrage of dismissals. See Daniel W.

Robertson, In Defense of Plausibility: Ashcroft v. Iqbal

and What the Plausibility Standard Really Means, 38

Pepp. L. Rev. 111, 140 (2010) (“In the few months since

the decision in Iqbal came down, it has resulted in the

dismissal of 1500 district court and 100 appellate court

cases, many if not most of which would probably have

survived; more dismissals are pending.”) (citation

omitted).

Nevertheless, we acknowledge that two of our sister

circuits have noted in passing that Shaffer requires a

minimum contacts analysis in an in rem proceeding. In

United States v. Batato, 833 F.3d 413 (4th Cir. 2016),

on which the dissent relies to support its reading of

Shaffer, the Fourth Circuit acknowledged that “Shaffer

provides only limited guidance as to how to proceed.”

in rem jurisdiction without regard to personal jurisdiction over the

owner of the res. See 541 U.S. at 447.

App. 20

Id. at 423. Contrary to the dissent’s contention that the

Court “applied” Shaffer to require satisfaction of

International Shoe in an in rem action, the Batato

panel “assume[d] without deciding that a traditional,

state-based minimum contacts approach is

appropriate” in a forfeiture action. Id. (footnote

reference omitted).8

Obaid also cites a Second Circuit case, LiButti v.

United States, 178 F.3d 114 (2d Cir. 1999), for the

proposition that “in rem jurisdiction cannot lie to

adjudicate ownership of shares owned by a nonresident . . . when the shareowner lacks minimum

contacts with the forum.” But the Second Circuit’s

holding was not as sweeping as Obaid contends.

LiButti involved litigation over the ownership of a

racehorse, “Devil His Due.” Id. at 116. When the IRS

issued a levy against the horse, contending that LiButti

owned it, his daughter brought a wrongful levy action,

claiming that she, not her father, was the owner. See

id. at 116–17. While the case was pending on appeal,

the daughter entered into a syndicate agreement

dividing ownership of the horse into shares, half of

which were sold to a third party. See id. at 117. When

the IRS ultimately prevailed on appeal, it sought

restitution for the full value of “Devil His Due” from

the daughter and the third party. Id. at 118. The

Second Circuit determined that the third party could

not be compelled to pay restitution because the court

8

Faced with these explicit statements from the Batato decision,

the dissent again falls back on “context” to spin its analysis.

Dissenting Opinion, p.40 n.9.

App. 21

had no personal or in rem jurisdiction under a

minimum-contacts analysis. See id. at 122–23.

Contrary to Obaid’s contention, the court did not

dismiss the in rem action for lack of jurisdiction—it

upheld the determination about the ownership of the

horse, notwithstanding any lack of jurisdiction over the

third party claimant. See id. at 120. The court simply

held that the third party could not be ordered to

reimburse the IRS. See id. at 122–23. 9

We are not persuaded by the lukewarm discussion

of Shaffer by the Fourth Circuit and the Second

Circuit. Neither are the other cases cited by the dissent

of sufficient persuasive value to undermine our

analysis of the Shaffer decision. For starters, not one of

the cases cited by the dissent involves a civil forfeiture

action, which is governed by a statute expressly

allowing a forfeiture action to be brought in any district

“in which any of the acts or omissions giving rise to the

forfeiture occurred,” even if the property “is located in

a foreign country.” 28 U.S.C. § 1355(b)(1)(A), (b)(2).

Consequently none of the cases, or the dissent for that

matter, grapples with the application of Shaffer to civil

forfeiture proceedings brought under a statute

conferring exclusive jurisdiction. A brief discussion of

each of the cases confirms this observation.

• Inland Credit Corp. v. M/T Bow Egret, 556 F.2d

756, 757 (5th Cir. 1977) - admiralty case brought

in rem against the vessel and in personam

9

The dissent once more resorts to analytic gyrations in an effort to

twist the Second Circuit decision to more closely mirror Shaffer.

See Dissenting Opinion, p.40 n.9.

App. 22

against the owner of the vessel. Cites Shaffer for

its “philosophy” without analysis and notes that

it was decided “in a quite different context”—but

did not apply Shaffer. Id. The dissent quotes an

order denying a petition for rehearing. The

underlying opinion expressly declined to address

the question: “We need not decide in the present

case whether the philosophical underpinnings of

the system of in rem jurisdiction in admiralty

have been critically shaken. . . .” 552 F.2d 1148,

1152 (5th Cir. 1977).

• Pickens v. Hess, 573 F.2d 380, 387 (6th Cir.

1978) - a case addressing in personam

jurisdiction. Cites Shaffer in a see also citation,

without analysis, to support the proposition that

the modern view of jurisdiction does not

“herald[] the eventual demise of all restrictions

on the personal jurisdiction of state courts.” Id.

(citation omitted).

• Lakeside Bridge & Steel Co. v. Mountain State

Const. Co., Inc., 597 F.2d 596, 600–02 (7th Cir.

1979) - a case addressing in personam

jurisdiction. Restates the holding of Shaffer,

without analysis, to support application of

International Shoe to the question of in

personam jurisdiction over a non-resident

defendant, not jurisdiction over a res.

Characterizes the Delaware court’s exercise of

jurisdiction as “in rem jurisdiction to sequester

shares of stock and stock options” even though

the action was quasi in rem. Id. at 601.

App. 23

• Salazar v. Atlantic Sun, 881 F.2d 73, 76, 80 (3d

Cir. 1989) - admiralty case. Distinguishes

Shaffer on the basis that Shaffer did not arise

“in the admiralty context,” and rejected a due

process claim raised by the owner. Id. at 76.

• Pittsburgh Terminal Corp. v. Mid Allegheny

Corp., 831 F.2d 522, 525 (4th Cir. 1987) - a case

addressing in personam jurisdiction. Recognizes

that International Shoe addresses in personam

jurisdiction and agrees with our interpretation

that in Shaffer, “the litigation there was not

related to the property [and] the only role played

by the property was to bring the defendants

before the court.” Id. at 526.

As stated previously, not one of the cited cases

purported to address civil forfeiture proceedings. Thus,

the dissent’s declaration of a circuit conflict is much

exaggerated, particularly in view of the lack of any

mention in Shaffer of overruling the legion of cases

embodying principles of in rem jurisdiction. And the

Supreme Court has continued to recognize in rem

jurisdiction predicated on presence of the res in civil

forfeiture proceedings post-Shaffer. See, e.g., Republic

Nat. Bank of Miami v. United States, 506 U.S. 80,

84–85 (1992). We are persuaded that Hood supports

our view that Shaffer is limited to quasi in rem actions

and does not extend to in rem actions. See Hood, 541

U.S. at 453 (noting the distinction in Supreme Court

App. 24

precedent between

jurisdiction).10

in

rem

and

in

personam

B. Venue

Under 28 U.S.C. § 1355(b)(1)(A), in a civil forfeiture

action venue is appropriate in “the district court for the

district in which any of the acts or omissions giving rise

to the forfeiture occurred.” The government emphasizes

that the words “any acts” encompass acts committed in

furtherance of the conspiracy. Obaid responds that this

interpretation is too broad. In contrast, he focuses on

the “giving rise to the forfeiture” language of section

1355. Under his interpretation, only a specific criminal

act that took place in the Central District, directly

implicating the Palantir shares, would establish venue.

We conclude that Obaid’s preferred interpretation

is much too narrow and ignores the antecedent

language in section 1355 permitting venue in the

10

The law review articles cited by the dissent—all of them

published before the Supreme Court’s decision in Hood—are

similarly unpersuasive on the issue of jurisdiction in forfeiture

proceedings. At best, commentators at the time confirmed that the

effect of Shaffer on in rem forfeiture proceedings is uncertain. See,

e.g., Andreas Lowenfeld, In Search of the Intangible: A Comment

on Shaffer v. Heitner, 53 N.Y.U.L. Rev. 102 (1978) (“The debate

goes on whether Shaffer v. Heitner really overruled Pennoyer v.

Neff [95 U.S. 714 (1878)], whether Seider v. Roth [216 N.E.2d 312

(N.Y. 1966)] can survive after Shaffer, [and] whether one can build

an effective structure to enforce judgments obtained in forum 1

against assets maintained in (or removed to) forum 2. . . .”); Angela

M. Bohmann, Applicability of Shaffer to Admiralty in Rem

Jurisdiction, 53 Tul. L. Rev. 135, 141 (1978–79); Kenneth G.

Whyburn, Attachment Jurisdiction After Shaffer v. Heitner, 32

Stan. L. Rev. 167, 167 n.1 (1979).

App. 25

district where “any acts” of the conspiracy occurred. 28

U.S.C. § 1355(b)(1)(A). His interpretation is also

inconsistent with the legislative history of section 1355.

The Congressional analysis of section 1355(b)(1)

explained that its enactment “would be a great

improvement over current law,” because the

government would no longer be compelled “to file

separate forfeiture actions in each district in which the

subject property is found.” 137 Cong. Rec. 31538 (Nov.

13, 1991). Contrary to Obaid’s assertion, section

1355(b)(1) broadened, not narrowed, the scope of civil

forfeiture suits “by providing that the court in the

district where the acts giving rise to the forfeiture

occurred has jurisdiction over the forfeiture action.” Id.

The threshold inquiry under section 1355 is

whether “sufficient acts . . . giving rise to the forfeiture”

took place in the Central District. $1.67 Million, 513

F.3d at 996. As alleged, the Palantir shares were

purchased using funds traceable to a $700 million

transfer to the Good Star Account as part of the 1MDB

scheme. Some of the alleged acts in furtherance of the

conspiracy were conducted in the Central District,

including expensive real estate purchases in Beverly

Hills, the financing of a motion picture, and the

purchase of the Palantir shares. Purchasing real estate

in Beverly Hills and shares of stock in Palantir are not

per se criminal acts. However, if the purchases were a

mechanism to launder proceeds in furtherance of the

1MDB scheme, “sufficient acts” giving rise to the

forfeiture occurred in the Central District, thus making

venue proper. See id. We thus conclude that the

conspiratorial activity in the Central District was

sufficient to support venue in that district, given “the

App. 26

relatively low standard set forth in section 1355.”

Batato, 833 F.3d at 420.

Finally, Obaid’s assertion that the actions of third

parties in the Central District (co-conspirators) cannot

serve as a proxy to establish venue based on his

conduct, misses the point. This civil forfeiture action is

not premised on Obaid’s conduct; rather, the action is

predicated on whether the Palantir shares, i.e., the res,

are traceable to the proceeds of a crime. See Ross, 504

F.3d at 1138. Accordingly, whether Obaid was involved

in the conspiracy is immaterial to the venue analysis.

IV. CONCLUSION

The Supreme Court decision in Hood supports our

conclusion that the district court did not err when it

determined that the constitutional due process

requirements set forth in International Shoe were

inapplicable to this in rem action. The Court’s decision

in Shaffer addressed quasi-in-rem actions rather than

in rem actions directed solely toward a res instead of

property seized as a substitute for the defendant. In an

in rem action, the focus for the jurisdictional inquiry is

the res, in this case Obaid’s Palantir shares, rather

than Obaid’s personal contacts with the forum.11

Finally, venue was proper because sufficient acts giving

rise to the civil forfeiture occurred in the Central

District.

11

Because we conclude that the district court correctly determined

that Shaffer did not extend to this in rem action, we do not address

whether Obaid had sufficient contacts with the forum as to satisfy

the constitutional due process requirements set forth in

International Shoe.

App. 27

AFFIRMED.

__________________________________________________

IKUTA, Circuit Judge, dissenting:

With one stroke, the majority has swept away

Shaffer v. Heitner, the Supreme Court’s landmark

decision ensuring that “traditional notions of fair play

and substantial justice” apply to all persons with

property subject to adjudication, regardless of the Latin

label attached to the proceeding. 433 U.S. 186, 212

(1977). Shaffer held that a court cannot extinguish a

person’s property rights unless it first obtains personal

jurisdiction over that person, and eliminated a 100year-old rule to the contrary as “fundamentally unfair.”

Id. Instead of applying Shaffer, the majority applies the

principles of in rem jurisdiction that Shaffer rejected as

lacking “substantial modern justification.” Id. In doing

so, the majority creates a split with two circuits that

have faithfully applied Shaffer and seven circuits that

have expressly construed it to cover ordinary in rem

proceedings. The majority’s attempt to bolster its

opinion with an irrelevant bankruptcy case, Tennessee

Student Assistance Corp. v. Hood, 541 U.S. 440 (2004),

is unavailing. Because Shaffer adopted a principle of

fairness and equity that the majority now ignores, I

dissent.

I

Obaid, a resident of Saudi Arabia and Switzerland,

purchased 2.5 million shares of stock in Palantir

Technologies Inc. by wiring funds to Palantir’s bank in

Northern California. Obaid states that the Palantir

stock certificate is currently held by a bank in

App. 28

Switzerland. Although the government argues that the

shares are deemed to be present in Delaware as a

matter of Delaware law, there is no dispute that the

shares are not in California.1

The government commenced a forfeiture action to

gain possession of the Palantir shares on the grounds

that Obaid had been engaged in a criminal conspiracy

and the Palantir shares were traceable to funds

indirectly linked to the conspiracy. The government

brought this suit in the Central District of California

based on a statute allowing a forfeiture action to be

brought where “any of the acts or omissions giving rise

to the forfeiture occurred,” even when the assets

subject to forfeiture are located in a foreign country. 28

U.S.C. § 1355(b)(1)(A), (b)(2). In this case, the specific

acts “giving rise to the forfeiture” that allegedly took

place in the Central District of California are vague.

According to the government, certain conspirators not

including Obaid, while engaged in a phase of the

alleged criminal conspiracy not involving Obaid, used

proceeds generated by the conspiracy to purchase

property in Beverly Hills and then sent emails abroad.

Over Obaid’s objections, the district court ruled it had

in rem jurisdiction over the Palantir shares, even

though it lacked personal jurisdiction over Obaid. This

interlocutory appeal followed.

1

For this reason, the majority’s suggestion that it is merely

honoring “the historical distinction between in personam and in

rem jurisdiction,” Maj. at 15, is incorrect. Whereas traditional in

rem principles gave courts jurisdiction “based on the court’s power

over property within its territory,” Shaffer, 433 U.S. at 199, there

is no dispute that Obaid’s Palantir shares are neither within the

court’s territory nor its control.

App. 29

II

Does a district court have jurisdiction over a

person’s property solely because alleged co-conspirators

took some actions within the court’s territorial

jurisdiction? Forty years ago, the Supreme Court

decisively said no—that jurisdiction over Obaid’s

property in such circumstances “is fundamentally

unfair to the defendant” and offends “[t]raditional

notions of fair play and substantial justice.” Shaffer,

433 U.S. at 212. Contrary to the majority’s efforts to

minimize Shaffer v. Heitner, this decision constituted

a dramatic shift in the Supreme Court’s jurisprudence.

A

In Shaffer, a plaintiff filed a shareholder derivative

suit in Delaware against a corporation and various

individual defendants, and at the same time obtained

an order sequestering the individual defendants’

Delaware property. Id. at 190–91. The defendants

argued that the sequestration order violated their due

process rights because they lacked sufficient contacts

with Delaware. Id. at 193. The Delaware court rejected

this argument, relying on a state statute that

authorized courts to sequester property in order to

compel the personal appearance of a nonresident

defendant; under this statute, the Delaware court had

quasi in rem jurisdiction. Id. at 193–94.

The Supreme Court reversed, and used the case as

a vehicle for radically reformulating the law of in rem

jurisdiction.

The Court first explained the historical roots of in

personam and in rem jurisdiction. Under “the century-

App. 30

old case of Pennoyer v. Neff,” a court’s authority was

based on its “power over either persons or property.”

Id. at 196, 199 (citing 95 U.S. 714 (1878)). If the court’s

jurisdiction was based on its authority over the person,

the court had “in personam” jurisdiction; if “based on

the court’s power over property within its territory,”

the court had “in rem” or “quasi in rem” jurisdiction. Id.

at 199. Although the Court recognized the difference

between judgments in rem and quasi in rem,2 that

distinction did not affect its analysis. The Court

explained that it would “for convenience generally use

the term ‘in rem’ in place of ‘in rem and quasi in rem.’”

Id. at 199 n.17.

Shaffer then described the development of in

personam jurisdiction. After Pennoyer, courts asserted

personal jurisdiction over a defendant when the

defendant was not present within the state only in

certain limited circumstances. Id. at 200–02. But

International Shoe Co. v. Washington dramatically

expanded jurisdiction over absent defendants. See id.

at 203–04 (citing International Shoe, 326 U.S. 310,

2

The Court explained:

A judgment in rem affects the interests of all persons in

designated property. A judgment quasi in rem affects the

interests of particular persons in designated property. The

latter is of two types. In one the plaintiff is seeking to

secure a pre-existing claim in the subject property and to

extinguish or establish the nonexistence of similar

interests of particular persons. In the other the plaintiff

seeks to apply what he concedes to be the property of the

defendant to the satisfaction of a claim against him.

Shaffer, 433 U.S. at 199 n.17.

App. 31

317–19 (1945)). Under International Shoe, due process

did not require the defendant’s presence. A defendant

“not present within the territory of the forum” could be

subject to a judgment in personam so long as he had

“certain minimum contacts with [the forum] such that

the maintenance of the suit does not offend traditional

notions of fair play and substantial justice.” Id. at 203

(quoting International Shoe, 326 U.S. at 316).

Accordingly, “the relationship among the defendant,

the forum, and the litigation, rather than the mutually

exclusive sovereignty of the States on which the rules

of Pennoyer rest, became the central concern of the

inquiry into personal jurisdiction.” Id. at 204.3

Shaffer then turned to the law of in rem

jurisdiction. The Court recognized that “[n]o equally

dramatic change [had] occurred in the law governing

jurisdiction in rem.” Id. at 205. But the Court stated it

intended to effect such a change, announcing that “the

time is ripe to consider whether the standard of

fairness and substantial justice set forth in

International Shoe should be held to govern actions in

rem as well as in personam.” Id. at 206.

3

International Shoe’s conclusion that personal jurisdiction must be

based on the relationship among the defendant, forum, and

litigation led to the development of two categories of personal

jurisdiction: (1) general jurisdiction, where defendants’ “affiliations

with the State are so continuous and systematic as to render them

essentially at home in the forum State,” and (2) specific

jurisdiction, where defendants’ “in-state activities” are “enough to

subject [them] to jurisdiction in that State’s tribunals with respect

to suits relating to that in-state activity.” Daimler AG v. Bauman,

571 U.S. 117, 126–27 (2014).

App. 32

Shaffer had no difficulty concluding that the answer

to this question was yes. According to the Court, “the

same test of ‘fair play and substantial justice’”

discussed in International Shoe should apply to

exercises of both in personam and in rem jurisdiction.

Id. at 207. This is because “[a]ll proceedings, like all

rights, are really against persons.” Id. at 207 n.22

(quoting Tyler v. Court of Registration, 175 Mass. 71,

76 (1900) (Holmes, C.J.)). The only functional

difference between an in rem and in personam

proceeding is “the number of persons affected.” Id.4

Therefore, going forward, any “exercise of jurisdiction

over the interests of persons” would have to meet “the

minimum-contacts standard elucidated in International

Shoe” in order to be “consistent with the Due Process

Clause.” Id. at 207. As with in personam jurisdiction,

“the relationship among the defendant, the forum, and

the litigation, rather than the mutually exclusive

sovereignty of the States on which the rules of

Pennoyer rest,” would determine whether a court has

in rem jurisdiction “over the interests of persons in a

thing.” Id. at 204, 207 (internal quotation marks

omitted).

Having announced the new rule governing in rem

jurisdiction, Shaffer considered and rejected the

arguments raised against such a change. Most

important, Shaffer brushed aside “the long history of

[in rem] jurisdiction based solely on the presence of

property in a State.” Id. at 211. The Court declared it

4

As discussed above, in personam proceedings impose personal

obligations on defendants, but in rem proceedings may affect all

persons with an interest in the property. Id. at 199 n.17.

App. 33

was not bound by precedent “supporting the

proposition that jurisdiction based solely on the

presence of property satisfies the demands of due

process.” Id. at 212. That obsolete idea had to be

rejected, because “‘[t]raditional notions of fair play and

substantial justice’ can be as readily offended by the

perpetuation of ancient forms that are no longer

justified as by the adoption of new procedures that are

inconsistent with the basic values of our constitutional

heritage.” Id. As to in rem jurisdiction in particular,

“[t]he fiction that an assertion of jurisdiction over

property is anything but an assertion of jurisdiction

over the owner of the property supports an ancient

form without substantial modern justification,” and

“[i]ts continued acceptance would serve only to allow

state-court jurisdiction that is fundamentally unfair to

the defendant.” Id.

Shaffer also rejected the argument that its

departure from precedent would eliminate jurisdiction

in too many cases. As the Court explained, “jurisdiction

over many types of actions which now are or might be

brought in rem would not be affected by a holding that

any assertion of state-court jurisdiction must satisfy

the International Shoe standard,” id. at 208, because

“the presence of property in a State may bear on the

existence of jurisdiction by providing contacts among

the forum State, the defendant, and the litigation,” id.

at 207. Where “claims to the property itself are the

source of the underlying controversy between the

plaintiff and the defendant, it would be unusual for the

State where the property is located not to have

jurisdiction.” Id.

App. 34

Encapsulating its rejection of 100 years of

precedent, the Court stated: “We therefore conclude

that all assertions of state-court jurisdiction must be

evaluated according to the standards set forth in

International Shoe and its progeny.” Id. at 212

(emphasis added). Applying its new rule to the facts

before it, the Court concluded that “Delaware’s

assertion of jurisdiction” was “inconsistent” with the

Due Process Clause. Id. at 216–17.

B

Shaffer is directly on point here. The government’s

forfeiture action against Obaid’s Palantir stock under

the civil forfeiture statute, 18 U.S.C. § 981(a)(1), is an

in rem proceeding. Under the statute, the government

“begins a judicial civil forfeiture action by filing an in

rem complaint against the property.” United States v.

$133,420.00 in U.S. Currency, 672 F.3d 629, 634 (9th

Cir. 2012). The district court then adjudicates the

interests of any persons claiming an ownership interest

in the property. 18 U.S.C. § 983(a)(4). If the

government prevails, title to the property vests in the

government. See United States v. Spahi, 177 F.3d 748,

754 (9th Cir. 1999) (citing United States v. 92 Buena

Vista Ave., 507 U.S. 111, 125 (1993)) (“under the

forfeiture statutes,” the United States “is required to

perfect title by legal action before title may vest.”).5

5

Although a forfeiture judgment under § 981 “relates back” to

when the offense was committed, see 18 U.S.C. § 981(f), “[w]here

there is no such judgment the government acquires no title or

interest in the property,” 1 David B. Smith, Prosecution and

Defense of Forfeiture Cases ¶ 3.05[2] (Matthew Bender). In other

App. 35

Under Shaffer, the district court’s jurisdiction over

the property subject to an in rem complaint constitutes

an “assertion of jurisdiction over the owner of the

property.” 433 U.S. at 212 (emphasis added).6

Therefore, Shaffer requires the district court to apply

the minimum contacts framework to each person who

claims ownership of the property. Id. Here, it is

undisputed that Obaid is the owner of the seized

Palantir shares. Under Shaffer, therefore, the district

court must consider whether Obaid has “minimum

contacts” with the forum such that “the maintenance of

the suit does not offend ‘traditional notions of fair play

and substantial justice.’” International Shoe, 326 U.S.

at 316. The district court did not address this question

of minimum contacts, and the answer is not obvious:

the government argues that Obaid has sufficient

contacts with the United States as a whole to confirm

the court’s jurisdiction under 28 U.S.C. § 1355(b), while

Obaid argues that the court must find that he has

sufficient contacts with California. We should remand

to the district court to address that question and

conduct the required minimum contacts analysis.

III

The majority acknowledges that “one might deduce”

from Shaffer that “Obaid’s position carries the day.”

words, a § 981 forfeiture proceeding adjudicates property not yet

owned by the government.

6

The conclusion that the court is asserting jurisdiction over Obaid

is particularly compelling where, as here, the court’s authority

over the res is merely a legal fiction: the Palantir shares are not

within either the territory or control of the district court.

App. 36

Maj. at 11. But the majority then concludes that the

Supreme Court undermined (or overturned) Shaffer’s

groundbreaking expansion of “fair play and substantial

justice” when it decided a subsequent bankruptcy case,

Tennessee Student Assistance Corp. v. Hood, 541 U.S.

440 (2004). According to the majority, Hood stands for

the proposition that a court may continue to assert

jurisdiction over the property rights of an absent owner

so long as it has in rem jurisdiction over the property

itself. Maj. at 12–13, 15.

The majority’s reading of Hood is incorrect because

it is based on a misunderstanding of the nature of

bankruptcy proceedings. In Hood, a debtor sought a

determination that her student loans were

dischargeable under 11 U.S.C. § 523(a)(8), which

provides that a bankruptcy court cannot discharge a

student loan guaranteed by a governmental unit unless

the court determines that allowing the debt to survive

would impose an “undue hardship” on the debtor. As

required by the Federal Rules of Bankruptcy

Procedure, the debtor filed a proceeding (styled as an

“adversary” action) against various government

guarantors, including the Tennessee Student

Assistance Corporation (TSAC), a state entity. Hood,

541 U.S. at 444–45, 451–52. TSAC moved to dismiss

the action, asserting sovereign immunity under the

Eleventh Amendment. Id. at 445. The Supreme Court

rejected TSAC’s argument, holding that a bankruptcy

court’s discharge of government-guaranteed student

loan debt under § 523(a)(8) does not implicate a state’s

Eleventh Amendment immunity. Id. at 450.

App. 37

The Supreme Court based this conclusion on the

nature of bankruptcy proceedings. In a “typical

voluntary bankruptcy proceeding,” the debtor invokes

the court’s jurisdiction by filing a petition for

bankruptcy. Id. at 447. The commencement of the

proceeding creates a bankruptcy estate consisting of

the debtor’s property interests. 11 U.S.C. § 541(a); see

also 1 Collier on Bankruptcy ¶ 3.01[4] (Richard Levin

& Henry J. Sommer eds., 16th ed.). The bankruptcy

court has jurisdiction over the debtor and the debtor’s

estate, Hood, 541 U.S. at 447, and creditors can

participate in the bankruptcy by filing a proof of claim,

11 U.S.C. §§ 501, 726. But the court does not adjudicate

the creditors’ property rights, see Hood, 541 U.S. at

447, and need not have jurisdiction over the creditors,

see id. at 453. At the close of the bankruptcy

proceeding, the bankruptcy court issues a discharge

order that “releases a debtor from personal liability

with respect to any discharged debt.” Id. at 447. This

proceeding is in rem, because it determines “all claims

that anyone, whether named in the action or not, has

to the property or thing in question.” Id. at 448.

Although a bankruptcy court does not exercise

personal jurisdiction over creditors, id. at 453, it is able

to provide the debtor with a fresh start from all debts

because “[a] federal court’s jurisdiction over the

dischargeability of debt . . . derives not from

jurisdiction over the state or other creditors, but rather

from jurisdiction over debtors and their estates.” Id. at

447–48 (quoting In re Collins, 173 F.3d 924, 929 (4th

Cir. 1999)). Of course, a bankruptcy court’s rulings may

affect creditors’ interests in the debtor’s property. For

example, a creditor’s debt may become uncollectible

App. 38

after a bankruptcy court discharges a debtors’ debts.

See 11 U.S.C. § 524(a). But this does not mean that the

court exercises jurisdiction over the creditor or the

creditor’s property. “A debtor does not seek monetary

damages or any affirmative relief from a [creditor] by

seeking to discharge a debt; nor does he subject an

unwilling [creditor] to a coercive judicial process. He

seeks only a discharge of his debts.” Hood, 541 U.S. at

450.

Hood applied these principles undergirding

bankruptcy jurisdiction to the question whether

bankruptcy proceedings could infringe a state’s

sovereign immunity when the state is a creditor. The

Court first noted that a state is treated like any other

creditor in bankruptcy, see, e.g., Gardner v. State of

New Jersey, 329 U.S. 565, 571, 573–75 (1947); Van

Huffel v. Harkelrode, 284 U.S. 225, 227–28 (1931), and

is therefore “bound by a bankruptcy court’s discharge

order no less than other creditors.” Hood, 541 U.S. at

448. Next, the Court concluded that because

bankruptcy proceedings do not adjudicate creditors’

property rights, the bankruptcy court’s “exercise of its

in rem jurisdiction to discharge a debt does not infringe

a State’s sovereignty,” and the court does not exercise

“jurisdiction over the State.” Id. at 448, 453.

Ignoring the difference between a creditor in a

bankruptcy case and a property owner in a forfeiture

action, the majority reads Hood as supporting

application of all “traditional in rem principles.” Maj. at

16. The majority’s sole support for this conclusion is

Hood’s cite to a civil procedure treatise and an

accompanying parenthetical stating that “jurisdiction

App. 39

over the person is irrelevant if the court has

jurisdiction over the property.” Hood, 541 U.S. at 453

(quoting 4A C. Wright & A. Miller, Federal Practice

and Procedure § 1070, pp. 280–81 (3d ed. 2002)). In

context, the parenthetical merely supports Hood’s

holding that a bankruptcy court’s in rem jurisdiction

over the debtor’s property is sufficient to resolve the

claims of all creditors (including a state) to that

property, and the court need not have jurisdiction over

the state to accomplish this goal. Id. Nothing in Hood

suggests that a court may exercise in rem jurisdiction

without personal jurisdiction over the owner of the res.

In sum, Hood did not resurrect the in rem

jurisdiction theory, rejected in Shaffer, that a court

may assert jurisdiction over an absent property owner

so long as it has jurisdiction over the property itself. To

the contrary, Hood did not mention or cite Shaffer and

held only that a bankruptcy court does not assert

jurisdiction over creditors because a bankruptcy

proceeding does not adjudicate their property interests.

Id. at 447. Because the debtor, not the creditor, owns

the property before a bankruptcy court, and the

bankruptcy court does not adjudicate the creditor’s

property rights, Hood had no occasion to address the

question whether a court with in rem jurisdiction over

property can adjudicate the rights of that property’s

absent owner.

As this description makes clear, Hood provides no

guidance here. Obaid is not a mere creditor. His rights

to the property he owns—the Palantir shares—are at

stake in the forfeiture proceeding. Nor is Obaid a

debtor who has voluntarily submitted himself and his

App. 40

property to the district court, obviating the need for

due process protections. Obaid is the person described

in Shaffer; the subject of a proceeding against his

property, and therefore against Obaid himself. 433 U.S.

at 207 n.22. Therefore, Hood gives the majority no

grounds for ignoring Shaffer.

IV

Although the majority recognizes that Hood is not

“precisely on point,” Maj. at 13, it provides other

reasons for ignoring Shaffer’s clear directive. These

reasons are equally misguided.

A

First, the majority tries to confine Shaffer to its

facts. Disregarding Shaffer’s statement that it was not

distinguishing between in rem and quasi in rem

jurisdiction, see 433 U.S. at 199 n.17, the majority

contends that Shaffer’s holding applies only to quasi in

rem proceedings, Maj. at 13–14, 15. According to the

majority, this reading is “supported by the failure of

the Court to expressly overrule its longstanding

precedent anchoring in rem jurisdiction to the presence

of the res.” Maj. at 14. Applying traditional in rem

principles, the majority contends that the defendant

here is the Palantir shares, not Obaid, and therefore

Shaffer’s “fair play and substantial justice”

requirements do not apply. Maj. at 15. 7

7

The majority also tries to distinguish Shaffer on the ground that

it does not apply to a civil forfeiture proceeding such as this one.

Maj. at 14, 20. But a civil forfeiture proceeding is an in rem

proceeding, and Shaffer stated that “all” assertions of in rem

App. 41

This reinterpretation of Shaffer contradicts

Shaffer’s actual language. The Court clearly

established a new rule for both in rem and quasi in rem

jurisdiction, concluding that “all assertions of statecourt jurisdiction must be evaluated according to the

standards set forth in International Shoe and its

progeny.” Shaffer, 433 U.S. at 212 (emphasis added).

Moreover, Shaffer did not ignore longstanding

precedent governing in rem jurisdiction. Rather, the

Court made clear that it was sweeping away “the

perpetuation of ancient forms that are no longer

justified.” Id. Indeed, the majority is right that the

Supreme Court has not overruled its precedent

governing in rem jurisdiction “without explicitly saying

so”—but only because the Supreme Court explicitly

said that is what it was doing. Maj. at 15.8 Shaffer’s

jurisdiction are subject to International Shoe’s minimum-contacts

test. 433 U.S. at 212. The majority has not explained why civil

forfeiture proceedings are exempt from Shaffer. Nor has the

government argued that civil forfeitures have unique

characteristics that place them outside Shaffer’s ambit. Indeed, at

least one circuit has applied Shaffer to a civil forfeiture proceeding.

See United States v. Batato, 833 F.3d 413, 423 (4th Cir. 2016);

infra footnote 9; cf. Maj. at 22 (asserting that the cases cited by the

dissent do not include cases applying Shaffer to civil forfeiture

proceedings.).

8

Shaffer could not be more clear:

“We are left, then, to consider the significance of the long

history of jurisdiction based solely on the presence of property

in a State. . . . This history must be considered as supporting

the proposition that jurisdiction based solely on the presence

of property satisfies the demands of due process, but it is not

decisive. . . . We therefore conclude that all assertions of state-

App. 42

language also refutes the majority’s claim that the suit

is against Obaid’s shares of stock, not Obaid himself.

Maj. at 15. Shaffer’s basic premise was that “[a]ll

proceedings, like all rights, are really against persons.”

433 U.S. at 207 n.22 (quoting Tyler, 175 Mass. at 76).

And “[a]n adverse judgment in rem directly affects the

property owner by divesting him of his rights in the

property before the court.” Id. at 206. Therefore, this

proceeding over Obaid’s stock is effectively a

proceeding against Obaid, and International Shoe’s due

process requirements apply.

B

Second, the majority makes strenuous efforts to

distinguish its narrow construction of Shaffer from the

decisions of other circuits that have faithfully recited

Shaffer’s holding. But even a brief review of the

relevant cases establishes that the majority’s

interpretation of Shaffer is contrary to our own

precedent and creates a circuit split.

We have long acknowledged that assertions of in

rem jurisdiction must satisfy International Shoe, “even

when the court’s jurisdiction is predicated on its control

over an item of property or res.” United States v. Ten

Thousand Dollars ($10,000.00) in U.S. Currency, 860

F.2d 1511, 1513 (9th Cir. 1988). Further, we have

recognized Shaffer’s ruling that “‘judicial jurisdiction

over a thing’ is a customary elliptical way of referring

court jurisdiction must be evaluated according to the

standards set forth in International Shoe and its progeny.”

433 U.S. at 211–12 (citations omitted).

App. 43

to jurisdiction over the interests of persons in a thing.”

Id. (quoting Shaffer, 433 U.S. at 207).

Our sister circuits have interpreted and applied

Shaffer the same way. In United States v. Batato, the

Fourth Circuit recited Shaffer’s conclusion that “in

order to justify an exercise of jurisdiction in rem, the

basis for jurisdiction must be sufficient to justify

exercising jurisdiction over the interests of persons in

a thing,” and applied “a traditional, state-based

minimum contacts approach” to determine whether it

had jurisdiction over claimants to property subject to a

civil forfeiture action. 833 F.3d 413, 423 (4th Cir. 2016)

(quoting Shaffer, 433 U.S. at 207).9 Similarly, the

Second Circuit acknowledged that Shaffer “explained

that to have in rem jurisdiction it is necessary, at the

very least, to satisfy the minimum contacts standard

9

The majority asserts that Batato did not follow Shaffer because

it “assume[d] without deciding” that Shaffer was applicable, and

stated that “Shaffer “provides only limited guidance as to how to

proceed.” Maj. at 18. This is incorrect, because the majority takes

these quotes out of context. Batato expressly acknowledged the

applicability of the minimum contacts test to in rem proceedings.

833 F.3d at 423. It then stated that Shaffer “provide[d] only

limited guidance as to how to proceed” regarding one aspect of that

minimum contacts test: whether a court must consider a foreign

property owner’s contacts with only the forum state, or with the

United States as a whole. Id. at 423 & n.3. But because the foreign

claimants had sufficient contacts with the forum state, Batato

could “assume without deciding” that the more demanding “statebased minimum contacts approach” controlled. Id. at 423. Batato

made clear that the court could not exercise in rem jurisdiction

without obtaining personal jurisdiction over the owner of the

property subject to civil forfeiture. In sum, nothing in Batato

suggests any reluctance to apply Shaffer.

App. 44

set out in International Shoe” and upheld the district

court’s conclusion that it lacked in rem jurisdiction over

a defendant that “did not have minimum contacts.”

LiButti v. United States, 178 F.3d 114, 123 (2d Cir.

1999).10 These faithful applications of Shaffer are

decisive holdings, not “lukewarm discussion[s].” Maj. at

20.

Other circuits have acknowledged the breadth of

Shaffer’s rule. Shortly after Shaffer was decided, the

Fifth, Sixth and Seventh Circuits correctly recited its

holding. See Inland Credit Corp. v. M/T Bow Egret,

556 F.2d 756, 757 (5th Cir. 1977) (denying a petition for

rehearing en banc and citing Shaffer’s holding that

“states’ assertion of in rem jurisdiction must satisfy the

same ‘minimum contacts standard’ applied to in

personam jurisdiction”); Pickens v. Hess, 573 F.2d 380,

387 (6th Cir. 1978) (citing Shaffer for the proposition

that “all claims of jurisdiction, both in personam and in

rem, must be evaluated in light of the standards of

International Shoe and its progeny”); Lakeside Bridge

& Steel Co. v. Mountain State Const. Co., Inc., 597 F.2d

10

The majority’s statement that Libutti “did not dismiss the in rem

action for lack of jurisdiction,” Maj. at 19, mischaracterizes the

case. For our purposes, the pertinent question in Libutti was

whether the district court could exercise jurisdiction over a third

party who had an ownership interest in a race horse. Libutti held

that the court did not have in personam jurisdiction over the third

party because the third party lacked minimum contacts with the

forum state, and “[s]ince [the third party] did not have minimum

contacts, the district court did not have in rem jurisdiction either.”

178 F.3d at 123. While Libutti upheld the trial court’s rulings with

regard to the defendant over which the court had jurisdiction, Maj.

at 19, this is irrelevant to our analysis.

App. 45

596, 600 (7th Cir. 1979) (stating, in its overview of in

rem jurisdiction, that “the principles of International

Shoe were held [in Shaffer] to govern assertion by a

state of In rem as well as In personam jurisdiction”).11

A decade later, the Third and Fourth Circuits cited

Shaffer for the same principle. See Salazar v. Atlantic

Sun, 881 F.2d 73, 76 (3d Cir. 1989) (noting that Shaffer

affected “traditional in rem procedures” by requiring

“the presence of a defendant’s minimum contacts with

the forum”); Pittsburgh Terminal Corp. v. Mid

Allegheny Corp., 831 F.2d 522, 526 (4th Cir. 1987)

(explaining that, after Shaffer, “the minimum contacts

rule of International Shoe would henceforth be applied

11

Scholars writing in Shaffer’s immediate aftermath expressed no

doubt as to whether Shaffer applied to in rem proceedings. See

Angela M. Bohmann, Applicability of Shaffer to Admiralty in Rem

Jurisdiction, 53 Tul. L. Rev. 135, 135 (1978–79) (“In its 1977

decision in Shaffer v. Heitner, the Supreme Court determined that

the due process clause of the Fourteenth Amendment required all

assertions of state court jurisdiction to be tested under the

principles established in its earlier decision in International Shoe

Co. v. Washington); see also, John R. Leathers, The First Two

Years After Shaffer v. Heitner, 40 La. L. Rev. 907, 910 (1980);

Stefan A. Riesenfeld, Shaffer v. Heitner: Holding, Implications,

Forebodings, 30 Hast. L.J. 1183, 1204 n.100 (1979); Joseph J. Kalo,

Jurisdiction as an Evolutionary Process: The Development of Quasi

in Rem and In Personam Principles, 1978 Duke L.J. 1147, 1189–90

(1978); Linda J. Silberman, Shaffer v. Heitner: The End of an Era,

58 N.Y.U. L. Rev. 33, 62–63 (1978); William R. Slomanson, Real

Property Unrelated to Claim: Due Process for Quasi in Rem

Jurisdiction?, 83 Dick. L. Rev. 51, 54 (1978); Joseph P. Zammitt,

Reflections on Shaffer v. Heitner, 5 Hast. Const. L.Q. 15, 17 (1978);

Donald W. Fyr, Shaffer v. Heitner: The Supreme Court’s Latest

Last Words on State Court Jurisdiction, 26 Emory L.J. 739,

757–78, 762–64 (1977).

App. 46

to actions in rem and quasi in rem, as well as to actions

in personam”).

Against this consensus, the majority’s erroneous

interpretation of Shaffer stands alone.12

V

Shaffer effected a transformation of the law of in

rem jurisdiction in order to ensure that “fair play and

substantial justice” prevail. In doing so, the Supreme

Court was well aware that it was sweeping aside a

century of jurisprudence which had allowed courts to

adjudicate rights to property even when doing so ran

roughshod over the rights of the persons who owned

the property. By attempting to confine Shaffer to its

facts, the majority turns its back on the Court’s

protection of due process rights and creates a conflict

with every circuit court that has addressed this issue.

I dissent from the majority’s failure to follow the

Supreme Court’s clear instructions.

12

While the majority notes that “no court has dismissed a civil

forfeiture action for lack of personal jurisdiction over a claimant,”

Maj. at 18, this is to be expected because a person with property in

a state is likely to have enough contacts with that state to satisfy

Shaffer, see 433 U.S. at 207–08. Shaffer itself predicted “that

jurisdiction over many types of actions which now are or might be

brought in rem would not be affected by a holding that any

assertion of state-court jurisdiction must satisfy the International

Shoe standard.” Id. at 208.

App. 47

APPENDIX B

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CV 17-4446 DSF (PLAx)

[Filed: August 15, 2018]

______________________________

UNITED STATES OF

)

AMERICA,

)

Plaintiff,

)

)

v.

)

)

CERTAIN RIGHTS TO AND

)

INTERESTS IN SHARES OF )

SERIES D PREFERRED

)

STOCK IN PALANTIR

)

TECHNOLOGIES,

)

________Defendant.___________ )

Order DENYING Motion to Dismiss for Lack of

Personal Jurisdiction and Improper Venue (Dkt. 45)

Claimant Tarek Obaid has moved to dismiss the

government’s forfeiture complaint against certain stock

in Palantir Technologies for lack of personal

jurisdiction and improper venue. The Court deems this

matter appropriate for decision without oral argument.

See Fed. R. Civ. P. 78; Local Rule 7-15. The hearing set

for August 20, 2018 is removed from the Court’s

calendar.

App. 48

The Court rejects Obaid’s argument that it needs in

personam jurisdiction over him in order to adjudicate

rights to the property. Obaid cites no authority holding

that a court must have in personam jurisdiction over

any particular claimant in a civil forfeiture action.

While it may include language that appears to support

Obaid’s argument, Shaffer v. Heitner, 433 U.S. 186

(1977), does not control the issue. Shaffer was a quasi

in rem action where the stated objection of proceeding

against particular property was to coerce a targeted

defendant into appearing in a forum where there would

otherwise not be personal jurisdiction. Obaid tries to

stretch Shaffer’s quasi in rem holding onto any type of

case where property is an in rem defendant. The only

appellate court case to specifically consider the issue

here correctly noted that Shaffer “provides only limited

guidance as to how to proceed.” United States v.

Batato, 833 F.3d 413, 423 (4th Cir. 2016).1 In addition,

the Supreme Court itself has discouraged a broad

reading of Shaffer. See Burnham v. Superior Ct., 495

U.S. 604, 620 (1990) (“[Schaffer] stands for nothing

more than the proposition that when the ‘minimum

contact’ that is the substitute for physical presence

consists of property ownership it must, like other

minimum contacts, be related to the litigation.”). It has

also reaffirmed a distinction between in rem and in

personam jurisdiction in the Eleventh Amendment

context, “even when the underlying proceedings are, for

1

The appellate case that is arguably most supportive of Obaid’s

position, Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d

214 (4th Cir. 2002), was, like Batato, out of the Fourth Circuit.

Given the discussion in Batato, the Fourth Circuit itself obviously

does not think that Harrods answers the question.

App. 49

the most part, identical.” Tennessee Student Assistance

Corp. v. Hood, 541 U.S. 440, 453 (2004). Hood is

especially instructive because it involved the

jurisdiction of a bankruptcy court to adjudicate claims

to property in the absence of in personam jurisdiction

over a claimant, a situation closely analogous to the

one here.2 The Supreme Court had little difficulty

concluding that “the Bankruptcy Court’s in rem

jurisdiction allows it to adjudicate the debtor’s

discharge claim without in personam jurisdiction over

the State [claimant].” Id.

Venue is also proper here. The civil forfeiture venue

provision provides for venue “in the district court for

the district in which any of the acts or omissions giving

rise to the forfeiture occurred.” 28 U.S.C.

§ 1355(b)(1)(A). In interpreting this language, it is

important to consider the context of the overall

allegations that the government believes justify the

forfeiture. In the context of the broad conspiracy

alleged here, “any act” should be interpreted as any act

of the conspiracy, not necessarily any act directly

relating to the property at issue. It is even less

supportable to argue that the act in question must

relate to a particular claimant, as Obaid occasionally

seems to suggest. The complaint alleges at least one

meeting in support of the conspiracy took place in Los

Angeles, Compl. ¶¶ 203-204, and that significant

proceeds of the conspiracy were funneled into property

within the Central District of California, id. ¶¶ 466-79;

2

In Hood, the claimant at issue was a state agency over which the

bankruptcy court arguably had no in personam jurisdiction due to

the Eleventh Amendment.

App. 50

480-96; 525-32; 660-64; 681; 731-50. The Complaint

also alleges that “Singapore Banker 1" took steps in

creating the Aabar-BVI Swiss Account via e-mail while

physically present in Los Angeles. Id. ¶¶ 203-204. That

email included the allegedly false explanation for the

account’s funding to justify BSI Bank’s involvement in

the transactions involving the account. Id. The timing

of the e-mail in relation to Singapore Banker 1's

meeting with Jho Low also suggests that the account

was a topic at the contemporaneous meeting between

the two in Los Angeles. All of these acts are part of the

acts giving rise to the forfeiture and make venue in this

District proper.

Obaid tries to define “any act” to mean only criminal

acts that generated the proceeds used to purchase the

given property. While it is possible to interpret acts

“giving rise to the forfeiture” as being only acts that

are, of themselves, criminal, criminal conspirators

typically engage in many acts that are not necessarily

themselves criminal but yet further the conspiracy in

some way. The complaint alleges a wide-ranging money

laundering conspiracy whose aim was to steal money

from the Malaysian government, funnel that money

through various channels, and then place the money in

investments around the world. Several acts in support

of that conspiracy took place in the Central District of

California, so venue is appropriate here for any

forfeiture relating to the conspiracy.

The motion to dismiss is DENIED.

IT IS SO ORDERED.

App. 51

Date: 8/15/18

/s/ Dale S. Fischer

Dale S. Fischer

United States District Judge

App. 52

APPENDIX C

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CV 17-4446 DSF (PLAx)

[Filed: September 24, 2018]

______________________________

UNITED STATES OF

)

AMERICA,

)

Plaintiff,

)

)

v.

)

)

CERTAIN RIGHTS TO AND

)

INTERESTS IN SHARES OF )

SERIES D PREFERRED

)

STOCK IN PALANTIR

)

TECHNOLOGIES,

)

________Defendant.___________ )

Order DENYING Motion for Reconsideration; Order

GRANTING Motion to Certify Order for

Interlocutory Appeal (Dkt. 76)

Claimant Tarek Obaid moves for reconsideration of

the Court’s August 30, 2018 order denying his motion

to dismiss for lack of personal jurisdiction and lack of

venue. In the alternative, Obaid moves for certification

of the order for interlocutory appeal. The Court deems

this matter appropriate for decision without oral

argument. See Fed. R. Civ. P. 78; Local Rule 7-15. The

App. 53

hearing set for October 1, 2018 is removed from the

Court’s calendar.

The motion for reconsideration is denied, if for no

other reason, because Obaid makes no attempt to

satisfy the requirements of Local Rule 7-18. While

there may be unusual instances where a motion for

reconsideration should be entertained even though the

moving party cannot satisfy L.R. 7-18, the current

motion is a very run-of-the-mill, “the court got it

wrong” style motion for reconsideration. These motions

are exactly what L.R. 7-18 is designed to govern.

Even putting aside L.R. 7-18, Obaid would not

succeed on a motion for reconsideration. Obaid did not

raise a personal jurisdiction argument with respect to

the res in his moving brief. Even in Obaid’s original

reply, the issue of personal jurisdiction over the res

itself seems to be limited to a passing, and incorrect,

argument that because the res is not in this District,

this Court has no personal jurisdiction over it. If other

arguments in the reply were intended to be directed to

personal jurisdiction over the res, that is certainly not

clear.

Obaid’s venue arguments are a recitation of

arguments Obaid either could have or should have

raised in the original briefing. There is no reason to

revisit the issue.

However, certification of the

interlocutory appeal is appropriate.

matter

When a district judge, in making in a civil

action an order not otherwise appealable

under this section, shall be of the opinion

for

App. 54

that such order involves a controlling

question of law as to which there is

substantial ground for difference of

opinion and that an immediate appeal

from the order may materially advance

the ultimate termination of the litigation,

he shall so state in writing in such order.

28 U.S.C. § 1292(b).

The Court has little doubt that the venue question

should be certified for interlocutory appeal. There is a

substantial ground for disagreement whether venue is

proper in this District. The language “any of the acts or

omissions giving rise to the forfeiture” in 28 U.S.C.

§ 1355(b)(1)(A) does not clearly answer the problem of

venue over properties involved in large multifaceted

money laundering conspiracies. Is the fact that the

property at issue was purchased using laundered funds

sufficient for venue in any district where an act in

furtherance of the money laundering conspiracy took

place? This is an especially difficult question where, as

here, the act(s) within the district took place in a

different “branch” of the conspiracy. That is, the

question is much easier if there is a direct path

between the act within the district and the purchase of

the res – i.e., the act within the district acquired the

money eventually used to purchase the property. The

question is less clear if, as appears to be the case here,

the res was purchased using funds that, while proceeds

of the same conspiracy, were not acquired directly

through acts within the district.

The personal jurisdiction question is closer, but the

Court also agrees that substantial questions on

App. 55

controlling law are present. While the Court agrees

with the government that Shaffer v. Heitner, 433 U.S.

186 (1977), does not require a showing of personal

jurisdiction over a claimant in a civil forfeiture case,

the language and reasoning of Shaffer certainly suggest

that it might. The Court of Appeals may, of course,

decline to entertain this question, see 28 U.S.C.

§ 1292(b), but the Court will give Obaid the chance to

raise it on interlocutory appeal.

Resolution of these questions would materially

advance the termination of the litigation if Obaid were

to be successful because there would potentially be no

venue or jurisdiction over the matter in this Court.

Further, numerous related civil forfeiture actions

pending before this Court raise the same or similar

issues. It would be much more efficient to have a

definitive ruling on jurisdiction and venue prior to

proceeding with the civil forfeiture cases. The case is

also well-suited for interlocutory appeal because it is

already stayed indefinitely pending resolution of the

related criminal investigation.

The motion for reconsideration is DENIED. The

motion to certify the order for interlocutory appeal is

GRANTED. The government is to provide notice of this

order to all claimants in the related 1MDB civil

forfeiture cases pending in this Court.

IT IS SO ORDERED.

Date: 9/24/18

/s/ Dale S. Fischer

Dale S. Fischer

United States District Judge

App. 56

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 18-80128

D.C. No. 2:17-cv-04446-DSF-PLA

Central District of California, Los Angeles

[Filed: December 20, 2018]

__________________________________________

UNITED STATES OF AMERICA,

)

)

Plaintiff-Respondent,

)

)

TAREK OBAID,

)

)

Claimant-Petitioner,

)

)

v.

)

)

CERTAIN RIGHTS TO AND INTERESTS )

IN SHARES OF SERIES D PREFERRED

)

STOCK IN PALANTIR TECHNOLOGIES, )

)

Defendant.

)

__________________________________________)

ORDER

App. 57

Before: LEAVY and HURWITZ, Circuit Judges.

The petition for permission to appeal pursuant to 28

U.S.C. § 1292(b) is granted. Within 14 days after the

date of this order, petitioner shall perfect the appeal in

accordance with Federal Rule of Appellate Procedure

5(d).

App. 58

APPENDIX E

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 18-56657

D.C. No. 2:17-cv-04446-DSF-PLA

Central District of California, Los Angeles

[Filed: November 2, 2020]

__________________________________________

UNITED STATES OF AMERICA,

)

)

Plaintiff-Appellee,

)

)

v.

)

)

TAREK OBAID,

)

)

Claimant-Appellant,

)

)

CERTAIN RIGHTS TO AND INTERESTS )

IN SHARES OF SERIES D PREFERRED

)

STOCK IN PALANTIR TECHNOLOGIES, )

)

Defendant.

)

__________________________________________)

ORDER

Before: RAWLINSON, IKUTA, and BENNETT, Circuit

Judges.

App. 59

Judges Rawlinson and Bennett voted to deny, and

Judge Ikuta voted to grant, the Petition for Rehearing

En Banc.

The full court has been advised of the Petition for

Rehearing En Banc and no judge of the court has

requested a vote.

Claimant-Appellant’s Petition for Rehearing En

Banc, filed October 8, 2020, is DENIED.

App. 60

APPENDIX F

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

28 U.S. Code § 1355 - Fine, penalty or forfeiture

(a) The district courts shall have original jurisdiction,

exclusive of the courts of the States, of any action or

proceeding for the recovery or enforcement of any fine,

penalty, or forfeiture, pecuniary or otherwise, incurred

under any Act of Congress, except matters within the

jurisdiction of the Court of International Trade under

section 1582 of this title.

(b)

(1) A forfeiture action or proceeding may be brought

in—

(A) the district court for the district in which any

of the acts or omissions giving rise to the

forfeiture occurred, or

(B) any other district where venue for the

forfeiture action or proceeding is specifically

provided for in section 1395 of this title or any

other statute.

(2) Whenever property subject to forfeiture under

the laws of the United States is located in a foreign

country, or has been detained or seized pursuant to

legal process or competent authority of a foreign

government, an action or proceeding for forfeiture

App. 61

may be brought as provided in paragraph (1), or in

the United States District court [1] for the District

of Columbia.

(c) In any case in which a final order disposing of

property in a civil forfeiture action or proceeding is

appealed, removal of the property by the prevailing

party shall not deprive the court of jurisdiction. Upon

motion of the appealing party, the district court or the

court of appeals shall issue any order necessary to

preserve the right of the appealing party to the full

value of the property at issue, including a stay of the

judgment of the district court pending appeal or

requiring the prevailing party to post an appeal bond.

(d) Any court with jurisdiction over a forfeiture action

pursuant to subsection (b) may issue and cause to be

served in any other district such process as may be

required to bring before the court the property that is

the subject of the forfeiture action.

U.S. Constitution Fifth Amendment

Fifth Amendment

Amendment V

No person shall be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a grand jury, except in cases arising in

the land or naval forces, or in the militia, when in

actual service in time of war or public danger; nor shall

any person be subject for the same offense to be twice

put in jeopardy of life or limb; nor shall be compelled in

any criminal case to be a witness against himself, nor

be deprived of life, liberty, or property, without due

App. 62

process of law; nor shall private property be taken for

public use, without just compensation.